Retail Giant Tesco Gears Up For Amazon Fight With Blinkboxmusic, Blinkboxbooks And TV Service In UK; Devices, Int’l Push Next?

The race for online consumers continues to heat up in the UK, and local retail giant Tesco wants to make sure that it doesn’t blink and let Amazon get the upper hand. Tesco today announced the launch of an all-encompassing digital entertainment service rebranded under blinkbox — blinkboxmusic, blinkboxbooks and Clubcard TV will join the blinkbox video streaming service, which Tesco acquired back in 2011. The music and book services, Tesco tells me, will launch sometime later this year, while Clubcard TV is coming out of a closed beta later this week.

To counterbalance the push Amazon has made with its digital media services coupled with hardware strategy and push into more traditional areas like grocery retail, Tesco has also announced a couple of key hires from Facebook and rival retailer Sainsbury’s to spearhead the effort. And TechCrunch understands that there may be more to come, including the launch of devices and a push to offer blinkbox services outside of the UK — also to match Amazon and others on the competitive front.

“If you take the blinkbox strategy, it started on web but now it’s about being where people are,” said a spokesperson. “Our device strategy is tablets. Tablets will be very significant for blinkboxbooks for example.”

Right now, Tesco does not offer any hardware with its services pre-loaded, a la the Kindle Fire from Amazon (in fact it sells the Kindle as a retail partner right now). The spokesperson would not comment outright on whether Tesco would explore a device route. But Tesco already sells an extensive range of consumer electronics, and bundles handsets with its Tesco Mobile service and so a move like this might not be so far off. Like Amazon, it would likely be a double-pronged strategy of OTT apps plus something more tailored. “These are services that will appear on different devices,” he said. “You won’t see one home for blinkbox entertainment.”

Similarly, although blinkbox may only be in the UK for now, there appears to be some interest in using it to help Tesco build up services in other markets, too. “Currently there is nothing specifically planned outside the UK, but that’s not always going to be the case,” a person close to the company told TechCrunch. The spokesperson would not comment directly on this, but did point out that Tesco itself has an extensive operation outside the UK, focused mainly on groceries, covering Asia, Eastern Europe and North America — 14 countries in all.

As the Telegraph noted earlier, the digital entertainment moves are being made to complement the service Tesco offers customers in its bricks-and-mortar business — where, like Walmart in the U.S. or Carrefour in France, Tesco provides a soup-to-nuts-style retail experience, covering everything from groceries to consumer electronics and clothes. For now, the blinkbox suite of services will continue to be run as a separate entity with only minimal tie-in at the physical store level, the article notes.

But make no mistake: they are there to onramp customers from Tesco’s legacy business into the one where things are growing the fastest, and where its competitors are putting much of their efforts.

“Tesco is one of the UK’s leading retailers of movies and TV, music and books. How customers choose to enjoy those products is changing rapidly as technology changes the way we shop,” said Michael Comish, CEO of Tesco Digital Entertainment, in a statement. “The development of these new services demonstrates our total commitment to providing the very best entertainment as easily as possible for our customers. They allow us to provide even more choice in how customers buy and enjoy their entertainment.”

Tesco, as background, was one of the early movers in online grocery delivery — where you order your food online and have it delivered to your door. So offering a wider and more encompassing retail experience on the web fits in with that. It’s also all the more important, given that Amazon’s own business has gradually moved well beyond books and is also getting increasingly more involved in Tesco’s bread and butter business (literally and figuratively speaking).

Here is the rundown of the three new services:

— blinkboxbooks will be the new name for Tesco’s own book service, which already one of the largest booksellers online and in stores in the UK. It will incorporate Mobcast, a service that Tesco bought for $7.2 million last year, and will include not only an end-to-end retailing platform for e-books but the ability to store a customer’s library in the cloud. The new MD for the service is Gavin Sathianathan, who was poached from Facebook, where he had been the company’s retail lead in EMEA — “making big companies social” according to his LinkedIn profile. He’d actually worked for Blinkbox before in 2007.

— blinkboxmusic will be the new name for the music service that Tesco has been growing for a while now, also somewhat inorganically: it bought streaming company We7 in June 2012 for $16.2 million. This division will be headed up with an exec that Tesco has picked up from Sainsbury’s, Mark Bennett. His last job at Sainsbury’s was listed as “head of digital and cross channel”, running services like the company’s fledgling mobile payments service (Mobile Scan & Go) and digital entertainment efforts, according to LinkedIn. Interestingly, he joined Sainsbury’s from Anobii, an e-book company that Sainbury’s invested in last year. This could signal that he will also have some involvement in Tesco’s e-book efforts.

— Clubcard TV, meanwhile, is due to launch this week and is the only new service that will not have blinkbox branding (for now). Clubcard is Tesco’s loyalty scheme, and the TV service will include both older films and TV shows, and will be free to those who are Clubcard members. To me, this looks like it will be the on-ramping service that Tesco hopes will be the route to bringing in more of its offline customers to its paid online services. While it’s not branded blinkbox, it will be run by someone who comes from there. Scott Deutrom is the internal appointment and he’s taking on the MD role.